Alternatives to Coca Butter - 2017 ReportAlternatives to Cocoa Butter - 2017 Report The outlook for...

Alternatives to Cocoa Butter - 2017 ReportThe outlook for CBEs, CBSs and exotic fats

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© 2016 LMC International. All rights reserved. Alternatives to Cocoa Butter – 2017 Report

Emerging markets have led demand growth for CBEs and CBSs in recent years, but economic downturns in Brazil and Russia have dampened prospects for continued expansion.

However, changes in chocolate legislation – a key driver for CBE growth – have been drafted in India, remain on the table in the US, and are the subject of discussion in other markets.

CBE & CBS markets – what's next?

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• Cocoa butter prices remain high, encouraging CBE use; softening palm kernel stearin prices make CBSs attractive.

• Expansion in processing capacity in West Africa and South East Asia is transforming the market for exotic fats, especially shea. CBE processing capacity is also expanding in Malaysia, Russia and Turkey.

What’s next for the sector?

LMC forecasts demand for chocolate confectionery in all the major markets and compares future raw materials supply and prices to assess the direction of CBE, CBS and cocoa butter markets over the short, medium and longer term.

Cocoa consumption in emerging Asian markets

0

50

100

150

200

250

300

350

400

450

2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15

Coc

oa co

nsum

ptio

n ('0

00 to

nnes

)

China India Indonesia Korea Thailand Turkey Other emerging Asia


Chocolate – a rare food item with a legal definitionGlobal chocolate confectionery market Current global market trends & determinants

of demand Market size by end-use, by region and by

country Analysis of trade flows of beans, butter,

liquor and powder

CBE and CBS demand What is the outlook in emerging markets?

Will Brazil and Russia recover? Will consumption in Latin America, Oceania

and India compensate? Which markets are being supplied by

increased capacity in South East Asia? Changes to legislation – what are the likely

impacts?

CBE and CBS production Definitions and formulations of each product Raw materials, usage and market size What is the evidence of substitution of CBSs

for CBEs?

Key topics in LMC’s Alternatives to Cocoa Butter Report

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Growth in emerging market demand for chocolate

90100110120130140150160170180

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15

cons

umpt

ion

grow

th in

dex

(200

0/01

=100

)

Advanced Emerging

0%10%20%30%40%50%60%70%80%90%

100%

Milk choc Chocolate with CBE CBE coating

CBE Cocoa butter Sugar Milk powder cocoa liquor


Exotic fatsShea, illipe, sal, kokum and mango kernel Production volumes Sustainability Consumer concerns How sustainable are exotic fats? What’s the future for certification?

Prices Exotic fats, palm kernel stearin and palm

mid-fraction prices and the link to cocoa butter – we examine the key drivers

Forecasts to 2025 Consumption of CBEs and CBSs by region

to 2025 Different regulatory scenarios – what ifs? Prices – raw material forecasts

Key topics in LMC’s Alternatives to Cocoa Butter Report

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LMC works in association with Dr Peter Lovett, one of the world’s foremost

specialists in the shea sector.

With 25 years of experience, the majority of it spent in the growing regions of Africa, Dr Lovett is internationally recognised as an expert in all

aspects of the shea industry. His insights ensure an authoritative, commercially-focused report for

strategic planning.


What Alternatives to Cocoa Butter provides


Geographical coverage

The report covers the countries and regions below:

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Supply

Shea

Ghana

Burkina Faso

Côte d’Ivoire

Mali

Sal, Kokum & Mango Kernel

India

Illipe & Palm Kernel Stearin

Indonesia & Malaysia

Demand (including processing)

EU

US

Brazil

China

Russia

India

Indonesia

Malaysia

Nigeria

Togo

Benin

Guinea


Industry structure• Describe collection methods and structure of the processing industry, profile of the major industry

participants and identify where nuts are processed

Oil palm products• Prospects for the supply and price of palm mid-fraction, palm kernel oil and palm kernel stearin

Trade• Trade flows and drivers, distinguishing between domestic consumption and providing details of

imports and exports by country, volume, value and unit prices

End-use demand• Volume dedicated to confectionery and cosmetics and trends • Update of market developments of major end-users in key markets

Outlook and forecasts• The key issues facing supply and threats to demand along with production and demand of CBEs and

CBS to 2025

1: The global chocolate confectionery market

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Demand is growing at the fastest rate in emerging economies, especially in Asia, albeit from a small base.

Rising incomes and the growing appeal of western products are the main drivers of consumption growth; however, growth is limited by the fact that in much of Asia, people do not have a taste for chocolate.

This part of the report covers: Market size and break-down by end-use, by

region and country Imports and exports for beans, butter, liquor,

powder and cake Outlook for growth

1: The global chocolate confectionery market, continued

Cocoa demand growth by region

Permitted vegetable fats for chocolate in the EU

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Fat Main regions of productionShea butter West AfricaIllipe fat BorneoSal fat IndiaKokum gurgi oil IndiaMango kernel oil IndiaPalm oil South East Asia

-2% 0% 2% 4% 6% 8%

Western EuropeNorth America

OceaniaCentral EuropeEastern Europe

AfricaSouth America

AsiaTotal

Annual grow th % between 2004/5-2014/15


The report examines global demand for CBEs and CBSs in the last decade and provides forecasts to 2025.

We break down demand by region with particular emphasis on markets with the greatest growth potential.

2: CBE & CBS production and demand

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Analysis of the four main drivers of CBE and CBS demand growth:

The price of cocoa butter (and price ratios)

Legislation

Consumer perceptions

Increased consumption of chocolate products in emerging markets

Focusing on production, the report outlines product formulations by raw material and end-use and delivers profiles of the leading producers and processors along with market trends.

Estimated worldwide CBE demand

2000 2002 2004 2006 2008 2010 2012 2014 2016

CBE

Dem

and

('000

tonn

es)


3: Exotic fats supply & trade flows

Shea nuts

West Africa

Europe

South America

Japan

Southeast Asia

India

Shea stearin

Shea butter

SheaSal oilSal stearin

Sal

10

We analyse the supply position of the major exotic fats used in the production of CBEs. The focus is on shea nuts, but we also consider the Indian fats (sal, mango kernel and kokum) and illipe.

Russia


We describe the marketing chains, from collector to exporter, and examine trends in the expansion of processing capacity, at origin and in South East Asia.

The chocolate industry demands increasing levels of certification to counteract a range of consumer perceptions that encompass concerns over exotic fat production:

3: Exotic fats: supply chains and sustainability

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Social issuesConditions for women harvesters and, historically, accusations of child labour

Economic issuesIs the growth of large-scale food production putting traditional family collection systems at risk?

Environmental concernsNew techniques offer prospects for shea trees coming into production in just five years (compared with the ten-fifteen years typical of seed-grown trees).

Could large-scale tree planting programmesimpact engendered shea management traditions and parkland land-use systems?

Global shea exports

0

50

100

150

200

250

300

350

400

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Expo

rts ('

000

tonn

es, n

ut e

quiva

lent

)

Nuts Butter/stearin


We analyse the behaviour of raw materials prices and their drivers, in particular the link between exotic fats and cocoa butter prices and the impact of fluctuating demand for cocoa products on powder ratios.

We forecast consumption of CBEs and CBSs to 2025, with the inclusion of “what if” scenarios based on potential changes to legislation.

The report lays out key strategic conclusions and highlights the drivers that are most important in shaping the markets. We identify likely medium-term opportunities, focusing on those markets with the greatest potential for growth.

4: Prices, forecasts & scenarios

Interaction of prices of cocoa butter, powder and shea

Malaysian FOB palm kernel stearin, olein and oil prices, and the FOB PKS-to-US cocoa butter price ratio

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01,0002,0003,0004,0005,0006,0007,0008,000

2000 2002 2004 2006 2008 2010 2012 2014

trade

uni

t val

ue ($

per

tonn

e)

cocoa beans cocoa butter shea butter cocoa powder

0

1,500

3,000

4,500

6,000

7,500

9,000

0

500

1,000

1,500

2,000

2,500

3,000

Jan-06Jan-07Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13Jan-14Jan-15Jan-16

US$

per t

onne

RBD Palm Kernel Oil RBD Palm Kernel OleinRBD Palm Kernel Stearin Cocoa Butter


Executive Summary• The report’s key findings and strategic recommendations

Main Report• Detailed analysis, tables and diagrams

Data in Excel• Historical production and consumption data by region and country• Future shea, sal and illipe crops• Forecasts of demand for CBEs and CBSs to 2025• Price data: trends in exotic fats, palm kernel stearin and palm mid fraction

PowerPoint Presentation• Key findings perfect for presentations in internal meetings

A day of consultation with one of LMC’s Senior Economists

Available in January 2017

Fee: USD $14,750

Deliverables, availability & fee

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We do not produce, trade or broker.

LMC’s analysis and advice is entirely objective.

LMC is the leading economic & business consulting company for global agribusiness

Oxford New York Kuala Lumpur Singapore

About LMC

LMC client list

LMC has a global client base for its cocoa analysis, reports and services. Companies that have used LMC’s services include:

AAKADEKAAsian Agri GroupBarry CallebautBean & CoBlackstone GroupBungeCargillCasa LukerCFI GroupCJ CheiljedangCocoa Board of PNGErnst & YoungEti Gıda Sanayi ve Ticaret A.ŞFerrero TradingFuji Oil

GAWI Oils & FatsGhana NutsGlobal Shea AllianceIDHIFCIndofood Agri Resources IOI Loders CroklaanISF - Intercontinental Specialty FatsItochu CorporationKraft FoodsMalaysian Cocoa BoardMalaysian Palm Oil BoardManoramaMercuriaOlamPacific Plantations

PT KharismaPT SampoernaPT SwakarsaRuchi AgritradingSamtanShanghai AndamanSolazymeSuryadeepInternationalUlkerUnilever United Cacao LtdWilmarWorld Cocoa FoundationYara

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Singapore16 Collyer Quay #21-00

Singapore 049318Singapore

T +65 6818 9231

[email protected]

While LMC endeavours to ensure the accuracy of the data, estimates and forecasts contained in the study described in this brochure, any decisions based on them (including those involving investment and planning) are at the client’s own risk.

LMC International can accept no liability regarding information analysis and forecasts contained in the study described in this brochure.

© LMC International, 2016All rights reserved

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New York1841 BroadwayNew York, NY 10023USAT +1 (212) 586-2427F +1 (212) [email protected]

Kuala LumpurB-03-19, Empire SohoEmpire SubangJalan SS16/1, SS1647500 Subang JayaSelangor Darul EhsanMalaysiaT +603 5611 [email protected]

Singapore16 Collyer Quay #21-00Singapore 049318SingaporeT +65 6818 [email protected]

http://www.lmc.co.uk/Cocoa-Cocoa_The_Global_Market

http://www.lmc.co.uk/Cocoa-LMC_Cocoa_Bulletin

http://www.lmc.co.uk/Oilseeds_Oils_and_Oleochemicals-LMC_Oil_Palm_Service_Indonesia_and_Malaysia

http://www.lmc.co.uk/Oilseeds_Oils_and_Oleochemicals-Oilseeds_and_Oils_2016_Report

http://www.lmc.co.uk/Oilseeds_Oils_and_Oleochemicals-Oil_Palm_Sustainability_Report_and_News_Updates

http://www.lmc.co.uk/Oilseeds_Oils_and_Oleochemicals-Coconut_Outlook_Strategic_View

http://www.lmc.co.uk/Cocoa-Worldwide_Survey_of_Cocoa_Production_Costs

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